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Sinochem proposes Nufarm takeover

China's Sinochem Corp has approached Nufarm Ltd over a potential acquisition, the Australian farm chemicals maker confirmed yesterday.

This would be China's second attempt to acquire Nufarm in two years, after China National Chemical Corp, or ChemChina, failed to launch its A$3-billion (US$2.45 billion) offer in 2007. But Nufarm said the Sinochem approach was also preliminary and incomplete and there is no certainty that any agreement will be reached or an offer put to shareholders.

"The Nufarm board will consider any offer or proposal it receives having regard to all the alternatives available to the company," Nufarm said in a statement, responding to an Australian Securities Exchange query after its shares soared 10.3 percent on Thursday.

Nufarm jumped 13 percent to A$11.12 yesterday following the announcement, giving it a market capitalization of A$2.42 billion. The firm, which supplies products to farmers to protect crops from damage caused by weeds, pests and disease, has operations in Australia, New Zealand, Asia, the Americas and Europe.

"The acquisition could help Sinochem expand market share in North and South America and upgrade China's product mix in agriculture chemicals given Nufarm's technology and formulation expertise, and it fits Sinochem's go-abroad strategy," said Xu Hongzhi, an analyst at Beijing Orient Agribusiness Consultant Ltd. "It's not aiming for domestic market supply as China is not short of herbicides and pesticides."

Sinochem declined to comment. Sinochem is China's top chemicals trader and also involved in oil exploration and real estate.


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